Capital Budgeting Problems

Problem 1

A project has After Tax Cash Flows of $70,000 in 20, $60,000 in 21, $50,000 in 22, $40,000 in 23 and $40,000 in 24. The capital outlay is $200,000 with a cost of capital of 10% Whats the NPV?

Create an Income Statement for your business complete with numbers and account titles. Make sure you include the following:

• COGS
• Gross Sales
• Income tax based on a 21% rate
• Operating Expenses
• Net Profit or Net Loss